How Much Does Auto Repair Shop Insurance Cost? 2025 Rates

U.S. repair businesses can expect to pay between $720 and $960 annually for comprehensive business insurance, averaging $60 to $80 per month. The primary cost drivers are shop size, services offered, location, equipment value, number of employees, claims history, and coverage limits.

How Much Does Auto Repair Insurance Cost?

On average, an auto repair shop in the U.S. might pay between $720 and $960 per year for full business insurance, which comes out to about $60 to $80 per month. But this is just a rough estimate, your actual cost can be higher or lower based on your shop’s specific situation.

Every auto shop is different, so there’s no one-size-fits-all price. A small garage with one or two mechanics will usually pay much less than a large repair center with multiple employees, high-end equipment, and a steady flow of customers.

Things like the types of services you offer (basic oil changes vs. engine rebuilds), your shop’s location, the value of your tools and machines, and your claims history can all affect your business insurance cost.

For example, shops in areas with high crime or accident rates may pay more for liability coverage. Similarly, if your shop stores flammable materials or has a higher risk of fire, your property insurance could cost more.

Here are some of the biggest cost drivers:

• Number of employees (affects workers’ comp and liability)
• Property size and value (affects commercial property coverage)
• Past claims history (insurers charge more if you’ve filed claims)
• Business interruption coverage and other add-ons

Understanding these variables can help you better estimate your insurance needs and prepare for the real costs of protecting your auto repair shop.

Average Auto Repair Insurance Costs For Coverage Types

When it comes to protecting your auto repair shop, different types of insurance cover different risks. Understanding the average cost, coverage details, and what influences pricing for each policy type can help you build a more effective insurance plan. Here’s a closer look at the major coverages most auto repair shops need.

• General liability insurance: $60 per month
• Business owner’s policy: $152 per month
• Workers’ compensation insurance: $155 per month
• Commercial auto insurance: $107 per month

General Liability Insurance

The average cost of general liability insurance for an auto repair shop is about $60 per month.

General liability covers third-party bodily injury, property damage, and advertising injuries. For example, if a customer walks into your shop, slips on an oil spill, and gets injured, general liability insurance would help cover their medical bills and any legal costs if they decide to sue.

Typical policy limits are $1 million per occurrence and $2 million aggregate.

Factors that influence the cost include the business size, location, customer traffic volume, previous claims history, and whether high-risk activities  are present, like working with flammable materials or heavy machinery.

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates are based on average annual premiums for auto repair shop businesses, compiled from both national carriers and regional insurance agencies. They reflect typical coverage limits for small-to-medium repair operations, considering risks such as customer injury, property damage, and liability tied to mechanical work. Actual premiums will vary depending on shop size, number of employees, claims history, services offered (e.g., bodywork, engine repair, tire replacement), and state-specific regulations.

Business Owner’s Policy (BOP)

The average cost of a business owner’s policy (BOP) is about $152 per month for an auto repair shop.

A BOP bundles general liability insurance with commercial property insurance. It protects against customer injuries, property damage, and loss or damage to the equipment. For example, if an electrical fire breaks out in your shop and damages your lifts, tools, and part of the garage, the BOP would help pay for repairs and equipment replacement.

Typical policy limits are $1 million per occurrence and $2 million aggregate for liability, with separate property coverage limits based on the value insured.

Cost factors include the property value, location risk (such as flood or crime rates), business revenue, number of employees, and any optional endorsements like business interruption insurance.

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates are based on average Business Owner’s Policy (BOP) premiums for auto repair shops, which typically combine general liability and commercial property coverage. Figures account for industry-specific risks such as employee injury, equipment damage, fire hazards from machinery, customer vehicle liability, and property coverage for tools and shop facilities. Actual premiums will vary depending on shop size, number of employees, services offered, location, coverage limits, property value, and claims history.

Workers’ Compensation Insurance

The average cost of workers’ compensation insurance for an auto repair shop business is around $155 per month.

Workers’ comp covers medical bills, rehabilitation, and lost wages for employees injured on the job. For example, if a mechanic injures their back while lifting a heavy car part, workers’ compensation insurance would help cover their medical treatment and a portion of their lost wages while they recover.

Policy limits are regulated by each state, but typically include medical costs and a percentage of lost wages without a set cap.

Premiums are influenced by the size of your payroll, the type of work employees perform , your claims history, and any implemented safety programs.

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates are based on average annual Workers’ Compensation premiums for auto repair shop businesses, incorporating state-specific base rates, employee classifications, and payroll ranges typical of both small independent garages and larger multi-location repair chains. Actual premiums will vary depending on your shop’s size, claims history, number of employees, and insurer underwriting practices.

Commercial Auto Insurance

The average cost of commercial auto insurance for an auto repair shop is about $107 per month.

Commercial auto insurance covers vehicles owned or used by the business for accidents, theft, vandalism, or damage. For example, if your shop owns a service truck used to pick up parts or tow customer vehicles, and one of your employees gets into an accident while driving it, commercial auto insurance would help cover the repair costs and any claims from the other driver involved.

Factors influencing the cost include the number and type of vehicles, how often they are used, the driving records of employees, whether deliveries are local or long-distance, and whether you add endorsements like hired and non-owned auto insurance (HNOA) for employee-owned vehicles used for deliveries.

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates reflect average annual premiums for auto repair shop businesses that operate service vans, tow trucks, or utility vehicles used for transporting tools, parts, and customer vehicles. Rates are based on blended averages from both small and large agencies, incorporating regional risk exposure, liability coverage levels, and vehicle usage patterns unique to repair operations. Actual premiums will vary depending on shop size, fleet composition, driving history, and insurer underwriting practices.

Auto Repair Shop Business Insurance Costs By Provider

Auto repair shop business insurance costs will vary greatly depending on the insurance carrier. Use the table below to find average costs across different providers.

Note: These estimates are based on average annual premiums for auto repair shop businesses, considering both small and large agencies. Coverage typically includes general liability, workers’ compensation, garage liability, commercial property, and equipment breakdown insurance. Actual premiums will vary depending on shop size, number of employees, services offered (e.g., mechanical repair, bodywork, tire services), equipment value, claims history, and coverage limits.

What Factors Impact Your Auto Repair Shop Insurance Costs?

Auto repair shop insurance costs are carefully calculated by insurance companies based on your shop’s risk level. Things like the types of repair services you offer, your location, past claims history, number of employees, and value of your equipment all play a role in how much you’ll pay for coverage.

Type Of Auto Repair Services

The kind of work your shop does affects your insurance costs. A basic oil-change garage usually pays less than a full-service repair center that handles engine rebuilds, electrical work, or body repairs. The riskier or more complex the services, the higher your premium may be.

Use Of Customer Vehicles

If your shop test-drives customer vehicles or provides towing, this adds risk. You’ll likely need commercial auto insurance or coverage for customer vehicles in your care, custody, or control, both of which can raise your insurance cost.

Location

Shops located in high-crime areas, regions prone to natural disasters, or busy urban neighborhoods typically pay more for property and liability insurance. A shop in a low-risk, suburban area may get lower rates.

Size Of Your Operation

Larger shops with more employees, higher customer traffic, and more vehicles on-site are at greater risk for accidents, injuries, or property damage. This increases the cost of general liability, property, and workers’ comp insurance.

Equipment And Property Value

If your shop owns high-value tools, vehicle lifts, diagnostic machines, or other equipment, you’ll need enough property coverage to protect them. The more valuable your assets, the higher your commercial property premium will be.

Claims History

If you’ve filed several insurance claims in the past, insurers may consider your shop high-risk, which can lead to higher rates. A clean claims record can help you qualify for better pricing and discounts.

How To Lower Your Auto Repair Insurance Costs

Running an auto repair shop can be a bit expensive, but your insurance bill doesn’t have to break the bank. While you can’t eliminate the need for coverage, you can take smart steps to reduce your premiums without sacrificing protection. Here are some practical ways to lower your auto repair insurance costs:

1. Bundle Your Policies

One of the easiest ways to save is by bundling multiple policies. Most insurers offer a Business Owner’s Policy (BOP) that combines general liability and property insurance at a lower rate than if you bought them separately. If you also need workers’ compensation, bundling both through the same provider can lead to additional discounts. Not only does this simplify your paperwork, but it also makes your coverage more cost-efficient.

2. Ask About Discounts

Insurance companies often reward auto repair shops that commit to a policy long-term. Ask your provider if they offer multi-year discounts for signing a two- or three-year agreement instead of renewing annually. You might also qualify for lower rates if you pay your premium in full instead of in monthly installments.

3. Implement Safety Measures

Accidents can be costly for both your auto repair shop and your insurance provider. Taking simple steps to keep your shop safe can help lower your insurance premiums over time. For example, using non-slip mats in work areas, keeping floors clean and free of oil spills, clearly marking hazardous zones, and regularly checking tools and equipment for safety can reduce the risk of injuries to both customers and employees, helping to lower your general liability risk.

4. Create A Safe Working Environment

Having a strong safety program can help lower your workers’ compensation insurance costs. This means training your employees on safe lifting techniques, proper use of tools and equipment, fire safety, and keeping clear emergency exits. When your staff follows safety rules and fewer accidents happen, you’ll have fewer insurance claims, which can lead to lower premiums over time.

5. Adjust Your Deductible

Your deductible is the amount you pay out of pocket before insurance coverage kicks in. Choosing a higher deductible can significantly reduce your monthly premiums. Just make sure you can comfortably cover that amount if a claim arises.

By taking these steps, you not only save money but also make your auto repair shop business a safer, and more resilient business.